Ethereum’s price could plummet to a range between $200 and $400 if the cryptocurrency market is entering a new bearish phase, according to a recent analysis.
In a post on March 11, insights were shared questioning the optimistic price predictions for Ethereum (ETH). Although some analysts believe $1,500 could serve as a support level for ETH, the analysis indicates that if a downturn is just beginning, historical patterns suggest an 80-90% price correction might drag Ethereum down to the $200-$400 range.
The analysis noted that Ethereum’s recent 30% weekly decline and a 50% drop over the past three months don’t guarantee that the worst is behind it, as true bear markets can inflict more severe losses.
Despite this bearish forecast, there remains a bullish sentiment among some investors, who recommend reassessing investment strategies for those unprepared for further declines.
Moreover, Ethereum whales are seen repositioning themselves amidst potential price drops. On March 11, a notable transaction was reported where a wallet associated with the Ethereum Foundation contributed 30,098 ETH (approximately $56.08 million) to MakerDAO. This move was aimed at lowering its liquidation price, resulting in the wallet holding a total of 100,394 ETH (worth $182 million) on Maker, with a liquidation threshold of $1,127.
Additionally, an Ethereum ICO whale transferred 7,000 ETH (around $12.94 million) to a major exchange, indicating potential selling pressure.
Ethereum faces challenges from decreasing network activity, diminishing institutional interest, and rising competition from faster, more cost-effective blockchain solutions. Recent data highlights that Ethereum spot exchange-traded funds experienced net outflows of roughly $119 million in just the past week.
Some experts suggest that spot ETH ETFs may be losing appeal compared to decentralized finance, offering yields of 4.5% on stablecoins but lacking staking incentives.
At the same time, Ethereum’s dominance in decentralized finance and perpetual futures trading is being threatened due to its fragmented layer 2 ecosystem and increasing competition from emerging platforms that have attracted billions in total value locked.
Due to the ongoing decline in network activity and decreased gas prices, Ethereum has struggled to maintain its deflationary status, now seeing an annual supply growth rate of 0.7%. Despite efforts intended to curb inflation, the EIP-1559 burn mechanism has not sufficiently countered new issuance.
The possibility of Ethereum regaining its previous support level of $2,600 appears uncertain without ETF staking benefits and heightened demand in decentralized finance. Currently, Ethereum is trading at approximately $1,850, with $246 million in liquidations reported over the last 24 hours.
